Startup Business Loans

In most posts exploring and explaining the startup business loans issue you will find something like ”one of the toughest tasks”, ”pretty challenging”, ”efforts demanding” and so on.

All hardships, to be fair, are a bit exaggerated, as there are lots of options for all kinds of entrepreneurs.

And if you have been enterprising enough to undertake starting up a business venture, you’ll quickly grasp what option is yours and how to get the most favorable terms.

Primary Steps when Starting up Business

All options used to start up one’s business are provisionally referred to as traditional and alternative. The former startup business loans(e.g., SBA loan programs and lines of credit) are usually considered as hard to get (eligibility criteria are rather broad) but more favorable in terms of repayment.

The latter loan options coming in the form of e.g. P2P sites or credit cards may be less restrictive in terms of eligibility but tougher to repay as they usually feature fairly steep interest rates.

An estimated size of your business (your tangible net worth and net income) and your, owner’s, credit score are two main eligibility criteria taking into account which you will make your first steps concerning what loan option you can qualify for.

Business Startup Loans You Can Qualify For

The following startup business loans are the most widespread options turned to when looking for working capital: the SBA programs, investors, HELs/HELOCs, P2P sites, ROBS, credit cards, microloans, crowdfunding and loans from friends/family.

Basically, all of these, except for some SBA programs, are fairly accessible to most small-business start-ups. And since this sector is the most vulnerable whenever it comes to subsidizing (most banks are reluctant to invest in), such a vast number of options encourages.

Applying for SBA’s products you can get the lowest interest rates, but you’ll have to share the ownership of your business with investors. HELs/HELOCs will charge rather low interest rates; however, your home will be the required collateral.

I would suggest applying for an SBA’s loan. This is what I did myself, and although yes, you have to share your business with them, the interest is so low that it doesn’t matter that much, as long as your revenues are increasing. And, it is better than starting a business with a family member or a friend because your relationship with them is at stake there. I would consider other startup loans too, ROBS in particular, but I’m not entirely sure that it works well.